April 28 (Bloomberg) -- Barrick Gold Corp. and Newmont
Mining Corp. blamed each other for a breakdown in merger talks,
the latest of several failed attempts over more than two decades
to combine the world’s largest gold producers and extract cost
savings from adjacent U.S. mining operations.

In a series of statements today, the companies sought to
assign responsibility for the end of the discussions. Toronto-based Barrick said in a statement that Newmont tried to renege
on three elements of the proposed deal after signing a term
sheet. Newmont said Barrick’s account was wrong and criticized
its Co-Chairman John Thornton for not being constructive during
the talks.

“Our efforts to find consensus have been rejected out of
hand repeatedly,” Newmont Chairman Vince Calarco said in a
letter to Barrick’s board released today.

In their talks earlier this month, Barrick and Greenwood
Village, Colorado-based Newmont identified annual savings of $1
billion, mostly from combining their Nevada assets, two people
with knowledge of the matter said April 19. Barrick was to offer
Newmont shareholders a takeover premium of 13 percent, the
people said. The talks were halted April 18 amid disagreements
related to a proposed spinoff of some of the combined company’s
mines, according to the people.

Barrick said today that after signing the term sheet,
Newmont sought to back out of agreements to locate the merged
company’s head office in Toronto, define the assets to be
included in a spinoff company, and to outline the roles of the
chairman, chief executive officer and lead director.

Andy Lloyd, a spokesman for Barrick, declined to comment on
the second statement today from Newmont. Newmont dropped 6.7
percent to $24.67 in New York. while Barrick fell 3.1 percent to
C$19.12 in Toronto.

Efforts ‘Rejected’

Under the most recent merger plan, Newmont CEO Gary
Goldberg would have retained his title while Thornton would have
been executive chairman, the people familiar with the proposed
deal said. Barrick CEO Jamie Sokalsky was to run the new spinoff
and Newmont’s Calarco was to be lead director, the people said.

“While our team has found your management team’s
engagement to be constructive and professional, the same
constructive nature cannot be said of our discussions with your
co-chairman on certain fundamental strategic and structural
issues over the past two weeks,” Newmont Chairman Vince Calarco
said in the letter to Barrick, which was dated April 25.

Planned Spinoff

“None of this suggests that we have the mutual respect or
shared values today that we believe are necessary for the
enterprise that would result from the combination of our
companies to realize its full potential,” Calarco said.

Munk, who will retire as chairman on April 30 and be
succeeded by Thornton, said last week that the latest round of
talks may be different from previous attempts to merge because
of the increased pressure to cut costs following gold’s decline.
Shareholders may also put pressure on the companies to seal a
deal, he said.

Gold plunged 28 percent last year, the most in three
decades, leading to at least $30 billion of writedowns across
the gold-mining industry.

Reduce Risk

While Newmont’s termination of the talks is a surprise, the
proposed deal would have seen Barrick diluting its investors as
it paid a premium for inferior assets with higher costs, Peter
Ward, an analyst at Jefferies LLC in New York, said today in a
note.

“Barrick shareholders should breathe a sigh of relief,”
he said. “Synergies in Nevada could be achieved through the
formation of a joint venture.”

Speaking in an April 23 interview at Bloomberg headquarters
in New York, Munk said the plan to spin off some of the combined
company’s assets outside North America would help reduce risk,
improve profitability and make the combination more attractive.

Newmont and Barrick have “cultural differences” that made
it difficult to reach a deal and Newmont is “not shareholder
friendly,” Munk said last week in an interview with the
National Post newspaper.

Pay Concerns

“The company has not adequately addressed key shareholder
concerns related to its co-chair’s compensation,” CPP said in a
statement on its website. CPP has a stake in Barrick of less
than 0.1 percent, according to data compiled by Bloomberg.

Some of Barrick’s largest investors last year criticized
the company’s compensation plan as excessive after Thornton was
paid an $11.9 million signing bonus. In March, Barrick outlined
its revised plans, including lower compensation for Thornton.